Trade talks between the United States and China could have a favorable outcome, Apple CEO Tim Cook believes, expressing optimism that the two countries could arrive at an agreement that has the potential to ease tensions that are affecting Apple's sales in the valuable market.

Apple CEO Tim Cook

Speaking ahead of a meeting between representatives of both countries in Beijing later this week, Cook is hopeful some sort of resolution can be reached in the talks, especially as it seems each of the nations' governments are seemingly willing to negotiate.

"Both sides are talking and I always think that is always the essential thing to reaching an agreement," Cook advised to NPR on Monday. "It's in both parties' best interests to come together."

The trade discussion between the US and China is an attempt to make an agreement before a March 1 deadline, with the aim to make an agreement on a number of issues, including intellectual property rights. If the deadline is not met, the Trump Administration has threatened to increase tariffs on imports from China, raising them from current levels of approximately 10 percent to 25 percent.

In the event the tariffs are raised, Cook believes that it is likely that Chinese officials will retaliate by economically attacking US-based companies in China, with Apple a prime target for punishment. As analysts believe close to 20 percent of Apple's business stems from the country, retaliation could prove costly to the iPhone producer.

In December, it was revealed a number of companies in China are urging their employees to boycott Apple products, following the arrest of Huawei CFO Meng Wanzhou in December. As well as showing solidarity for another Chinese company, it is likely that some of the drive for the move is down to the current trade tensions between the two nations.

Further retribution from the Chinese government would cause even more pressure on Apple, on top of issues it would face from the US government's own tariff rises. So far, iPhones have yet to be caught up in the tariff war, but President Donald Trump has hinted at including the smartphones in the future if the situation doesn't improve.

Analysts believe that, if such tariffs are applied to iPhones being imported to the United States from China, it could potentially increase the cost per device by between $60 and $160.

While a major market, Apple has stumbled in China, with its latest quarterly results revealing a 26.7 percent year-on-year drop in revenue, with Cook noting the country accounted for "all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline."

To counter falling sales, Apple has slashed prices of the iPhone 8 and iPhone XR, a tactic that seemed to have worked. For one retailer in the region that cut its prices on January 13, it reported a 76 percent surge in sales of the two models by January 29.

Someone has to advise Cook that he should concentrate on those issues that he can influence, instead of external factors, like:
- iPhone price levels
- iPhone competiveness
- iPhone price/performance
- iPhone specific features that facilitate Far-Eastern use/usage patterns
(sorry: return key not being recognised in febr 2019)

Translation- 'Please please let me make money without offending either side.'
Gee, a tariff of $60-$160 will tank sales, whereas Apple raising prices has the opposite effect.
Must be some law of economics I'm unfamiliar with.
Can't wait for the new 3 eye'd iPhones. Now >THAT'S< innovation easily worth an additional 10-20%

The US government is currently touring Europe and 'threatening' countries if they sign deals with Huawei. Two weeks ago it was simply 'urging' countries.

When those countries said they had no evidence of wrongdoing, and the US government didn't provide any either, they said they wouldn't rule out dealings with Huawei. That's when the 'threats' started doing the rounds.

I doubt China is happy with that, so TC's worst fears are definitely in sight.

The US government is currently touring Europe and 'threatening' countries if they sign deals with Huawei. Two weeks ago it was simply 'urging' countries.

When those countries said they had no evidence of wrongdoing, and the US government didn't provide any either, they said they wouldn't rule out dealings with Huawei. That's when the 'threats' started doing the rounds.

I doubt China is happy with that, so TC's worst fears are definitely in sight.

I find it so fucked up how people find a way to punish Apple even when they do nothing wrong.

I say fuck China and if the U.S. had any balls they would protect Apple IP and place huge fines on these knockoffs.

The US government is currently touring Europe and 'threatening' countries if they sign deals with Huawei. Two weeks ago it was simply 'urging' countries.

When those countries said they had no evidence of wrongdoing, and the US government didn't provide any either, they said they wouldn't rule out dealings with Huawei. That's when the 'threats' started doing the rounds.

I doubt China is happy with that, so TC's worst fears are definitely in sight.

I find it so fucked up how people find a way to punish Apple even when they do nothing wrong.

I say fuck China and if the U.S. had any balls they would protect Apple IP and place huge fines on these knockoffs.

I think something is wrong in there. I am simply stating why Apple might see things get worse. If you want to know why that might be, you should at least try to see who has been 'rattling the cage' as it were.

Can you understand why the Chinese government could be annoyed with the US government going on tour tell other governments (yes, other countries!) what to do with Huawei? A Chinese national champion at that! And then, when 'urging' seemed not to get the right results, literally threatening them with consequences?

I am not making this up. The US even harked back to recent history and basically said if you're not with us on this, then you are against us. I wonder how many allies resent that kind of treatment! Especially when most of them have already caught the US spying on them.

I always try to shy away from politics and remain as neutral as possible but while Apple is an innocent victim in all this, the true cause of the situation remains squarely on the shoulders of the US as it fears losing ground in such an important tech area. Take a look at the opinion of someone from the US:

I think Apple priced the current iPhones with the idea that a tariff was coming...i am sure currency headwinds and the loss of carrier subsidies played some role but it seemed like prices were still $100 too high across the upper end of the iPhone range.